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Homeless sign up for mobile phones in gift-card scam

14.05.2008 12:00 Shopping - Source: cbc.ca

A mission in inner-city Winnipeg and a local electronics store are trying to sort out an unusual scam that saw dozens of homeless people sign up for cellphone contracts.

Theresa Saunders, a director at Siloam Mission, knew something was up last week when she noticed many of the homeless people who stay at the shelter showing off new cellphones.

Saunders then saw a man approaching Siloam clients outside the mission, telling them about a deal that could get them free cellphones for four months.

The man offered a ride in his van to a Visions Electronics store in the St. James area of the city to partake in the cellphone offer. As many as 40 of the homeless shelter's clients took him up on it.

Upon further investigation, Saunders learned the store was offering a deal in which new cellphone clients were given a $60 store gift card and four months of free mobile service. Most of the Siloam clients turned over the gift card to the man in the van as payment for the ride, Saunders said.

Saunders called the store to complain, shocked to learn they were giving the phones to so many of the mission's clients. Most of them are on welfare and will be unable to pay the bills after the free trial period is up, she noted.

"You know, how do they do a credit check? How do they, when someone's on social assistance, how do they still qualify for a phone?" she said.

"Who's signing you up? Say … [a guy named] George is coming in every day with 30 customers. A flag should go off."

Kyle Frizzley, manager at Visions Electronics, said his staff did find the situation strange but didn't know what they could do.

"He said, 'I know these people. These are my friends. These are people from my community, and they want cellphones,'" Frizzley said. "It's tricky for us. It would be wrong for us to just start judging people."

The man behind the scheme has been contacted and is no longer welcome in the store, Frizzley said. The company is considering legal action against the man.

"[They] let him know how disgusted they were," he said. "He was basically taking advantage of people."

If the mission's clients turn in their cellphones, Frizzley said, Visions will cancel the contracts at no charge.

But Saunders said none of the mission's clients wants to turn in their phone before the free four-month trial period is over. She expects most will be cut off once they rack up a bill.

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